Sun Jul 03, 2011 at 15:00:00 PM PDT

It's becoming clear that, despite the efforts of the Zombie Death Cult to stop it, Californians are going to vote sometime between now and November 2012 on whether taxes will go up in order to ensure everyone can live the California Dream, instead of suffering in poverty, hunger, illness and without education or a job.

The question now is, what kind of tax proposals will we see?

Taxes need to go up across the board. Everyone needs to pay more. But whereas most working Californians need to pay only a little bit more, the rich and the corporations need to pay a LOT more. The state's recession and its budget problems stem from the inequality caused by 30 years of successful conservative policy to create huge tax loopholes for the rich.

As wealth flowed out from public services and the pockets of the middle class and especially from low-income Californians, the pillars of the economy and the state budget eroded. It's become a vicious cycle, creating bigger economic crises, worse budget deficits, and more dire living conditions for the Golden State.

So obviously the first step of any sensible tax reform would have to be reversing this process by jacking taxes up on the wealthy and the corporations.

Corporations saw their income rise by 400% from 2001 to 2008. The average growth in wages and income for everyone else in the state was about 25%. That's unequal and unjust. The corporations have our money, and it's time we took it back.

Further, a higher corporate rate has been used in the recent past without causing problems for the state's economy:

Between 1967 and 1980 the corporate rate rose from 5.5% to 9.6%. The first spike upward was, in fact, signed into law by Governor Ronald Reagan. California businesses did well in the second half of the 1970s and very well in the 1980s. Silicon Valley in particular thrived during these years. California's schools were top-notch and higher education was still affordable. We are, in fact, living off the investments we made during those years, although they're nearly exhausted.

So we can see a clear case for a higher corporate tax rate. What about a higher personal income tax rate?

Same here. If you want to go where the money is - and good tax policy suggests you should - then a higher income tax is a good idea too.

It's especially significant when you consider that California has a single tax bracket for individual incomes between about $45,000 and $999,999. In other words, someone who makes just $50K a year pays the same income tax rate as someone making just under $1 million a year. It's totally fucking absurd.

Progressives, led by Fix California, are calling on Governor Jerry Brown to include a 1% tax surcharge on the incomes of the top 1% in the proposals he will help bring to the November 2012 ballot. That's a damn good start to true tax reform. So too is the so-called "split roll" where the Prop 13 tax loophole is closed for commercial property, something Jerry Brown recently hinted he was open to doing.

Although it's too early to contemplate the 2012 general election ballot, politicos already are hard at work. California Forward, a nonprofit funded by civic-minded philanthropists, is among the groups working on initiatives, as is Think Long, which is funded by billionaire Nicholas Berggruen.

Writer Nathan Gardels, part of the Think Long group, laid out a tentative prescription for fixing state government and the initiative system. More detailed proposals will come by Oct. 1.

"Our idea is to reboot and install new civic software," Gardels told me.

Gardels said the group is contemplating a ballot measure that would significantly cut income taxes, while extending sales taxes to services. The additional money - perhaps $20 billion extra a year - would go to local government and schools.

This is the wrong direction. Extending sales taxes to services IS a good idea - everyone needs to pay more to save the California Dream from collapse, but some people, like the rich and the corporations, need to pay a LOT more. Lowering the income and corporate tax rates are a huge step backward, and will produce more budget deficits and a weaker economy because, as the evidence shows, they will produce greater inequality.

In May 2009 conservatives opposed to taxes and progressives opposed to spending caps united to defeat Prop 1A. It's clear that there is an electoral majority to oppose this kind of corporate-friendly crap. We know that conservatives will vote against a proposal that would extend sales taxes to services, even if it contained lower income and corporate tax rates. Their ideological opposition to taxes is that absolute.

So groups like California Forward and Think Long will have to count on progressives being suckers and voting for a bad deal that merely makes inequality worse.

Progressives need to say it loudly and clearly and say it now: no cuts to income or corporate tax rates will be acceptable. Any proposal that includes further cuts will be opposed by progressives. Those cuts are not options.

Instead, we need to raise both rates, and start on the upper end of the scale. Income and corporate tax rates ought to start rising, not falling, if California is to have a future of shared prosperity, high quality of life, and a population that is happy instead of suffering.

I am looking at the second graph. From 1960 to 1986 there's a pretty clear relationship between the tax rate and the amount paid: when the tax rate went up to 7%, they paid ~7% in taxes; when it went to 9% they paid ~9%.

But then, after 1986, the amount paid fell rapidly. The rate fell a bit, sure, but not nearly as much. The rate is now 8.84%, apparently, but the actual amount paid has fallen to about 5.2%.

So there's clearly something going on apart from the rate, and I'd like to know what that is.

California corporations have been given more tax breaks since the early 1990s, and many of them have also taken advantage of federal loopholes that allow them to hide more of their profits from the tax man.

This does suggest that not only does the rate itself need to rise, but the loopholes need to be closed.

Statements like this make it very hard to take you seriously. Suffering exists just below that wall that separates us from Mexico. Real poverty that is ugly and sad. The ABSENCE of capitalism and opportunity leads to the suffering we see down there.

There is know macro level suffering in this state. Just because you don't have all the things you want or even some of the things you need does not mean you are suffering. Struggling maybe...

"Extending sales taxes to services IS a good idea - everyone needs to pay more to save the California Dream from collapse, but some people, like the rich and the corporations, need to pay a LOT more"

All this will do is pass costs on to the consumer or change business models (Hello Amazon affiliates!) Revenue can only have a real net positive effect from created value through economic growth. Anything else is just shifting money around to your desired demographic at the expense of others. And that expense invariably hits the middle class' purchasing power the most. Expanding the sales tax to services would only exacerbate the problem. An individual is taxed on their income. I charge a sales tax on my services and then pay an income tax on that labor! Are you mad dude. Triple tax?!?!

You want sales tax on services? I'll make you a deal eliminate the income tax and go flat on sales taxes. everybody would then have skin in the game. Can't get fairer than that.

Even in the most distressed areas of this state people are still playing their Wii and eating pizza on Fridays. Sure their neighborhoods may suck and they may not work the greatest jobs, but that is not suffering. There is no government sponsored utopia out there my friend.

I understand 'yalls goals of maximized equality. But in there speak of the internets "You're doing it wrong" :-)

Hi. I'm Charles. I worked my way from homelessness to a business owner. Be what you have it in you to be!

Just because you're not suffering doesn't mean others aren't. I'd like to tell you the story of a man I once loved and married.

He worked for many years in the printing industry. He was good at it and made a good living. But it has largely moved offshore and there are far more people around with skills in the industry than there are jobs. So, for some years, he drifted around from one job to another. He finally wound up as a grocery clerk. He barely made enough to live on. But he enjoyed the customers, and they liked him.

Then he got sick. He lost his job and his insurance. And he discovered he was too old for Medicaid (which cuts off at 60), and too young for Medicaire (which starts at 65). The county he lived in had medical services. But because of cuts in state funding, they now only treat people with "life-threatening conditions." So he went to free clinics who couldn't really help him either, and showed up at the ER a lot.

Despite what politicians tell you, the ER doesn't actually treat uninsured people. They make sure you're not about to die, stabilize you, and release you with instructions to see your own physician. Which is what they did with him.

I went to visit my ex-husband today in the hospital. He's in intensive care, comatose, on dialysis and a ventilator. They don't know if he'll live. If he does, he may have brain damage.

Talking to the nurse, she says they see this a lot. When I said I was tempted to go to DC and smack the next politician who said the ER was adequate medical care for the uninsured, she said a lot of nurses would come with me.

He was not a good husband. But he's not a bad person. He worked hard, was talented, intelligent, funny, and friendly. One of the ER nurses said she remembered him and how nice he was. How he always thanked everybody and made them laugh. And now he's a vegetable at 62.

Because of the tax cuts for the rich you seem so eager to protect, he will not be the last person to suffer and die. Government cuts will throw people out of jobs that provided medical insurance. Cuts to medical clinics and funding for Medi-Cal will mean that more people will go without care until it's too late.

I can only hope that heartless bastards like you end up learning what real suffering is by meeting a similar fate.

He was not a good husband. But he's not a bad person. He worked hard, was talented, intelligent, funny, and friendly

This I don't doubt and I had a similar case in my family and we had to pitch. It happened a few years ago and I felt proud of myself for helping but then I thought about it. I'm not cold but rational. At 60+ you've had atleast 40 years to plan for the inevitable day that you'll be old.

I find it amazing that people that didn't plan for it (low income seniors) all of a sudden make the news and the reporter will say how sad it is that this grandparent-like figure has to live in cheap housing or cant afford treatment or food. Etc.

But never do you hear the back story of how this person for forty years never pocketed away money. Never planned. Family relationships maintained. No plan for the future. Their poor planning becomes our emergency.

Hey college kids here's a quick lesson. Do you know why your tuition is going up while senior programs like social security are a thirdail? Middle class feel the squeeze but the seniors don't? Liberals see how angry and gray the Tea Party is but they won't cut their socialism?

They know whats at stake, they know they need to vote. Forget your class war, the under 65 crowd has been losing the generational war for years.

This I don't doubt and I had a similar case in my family and we had to pitch. It happened a few years ago and I felt proud of myself for helping but then I thought about it. I'm not cold but rational. At 60+ you've had atleast 40 years to plan for the inevitable day that you'll be old.

I find it amazing that people that didn't plan for it (low income seniors) all of a sudden make the news and the reporter will say how sad it is that this grandparent-like figure has to live in cheap housing or cant afford treatment or food. Etc.

But never do you hear the back story of how this person for forty years never pocketed away money. Never planned. Family relationships maintained. No plan for the future. Their poor planning becomes our emergency.

Unfortutely, not everybody is as gifted as you obviously are.

A good example is someone I know, who in 2001 was laid off from a position as a software engineer, during the collapse of that market. He was 40, had done well, was debt free and had $400k in the bank (as of January 1, 2000.) He was considered one of the best engineers in his field.

Unfortunate for him, he spend his time trying to stay on top of his professional skills, not managing investment portfolios or the like. As a result of the market crash, his investments were down $150k by the time he was laid off,

2001 was a lousy year for software professionals, no matter how skilled, there was no hiring. There was none in 2002. He got some minor contract work in 2003 and 2004, but didn't get any full-time employment until late 2004. No benefits, paying for any insurance out of pocket, along with living expenses... Not much was left from those investments.

Skills 18 months out of date for a software engineer are useless for finding work. He tried other things, but changing careers is never easy.

Once he found work, he tried to rebuild -- but last I heard, his 401k is worth less than the combined value of the contributions, once again, due to a market crash.

The point is -- you can plan all you want, but sometimes events are out of your control, and you can't know everything. That's why a civilized society provides a safety net. Yes, it may catch some who "didn't plan" but so what? It is still better to catch them than live in some Dickensian nightmare of a society.

Oh I agree the system is a mess and I agree that some safety net need sto exist. But there is ahuge difference between a safety net and a cradle and if you look at how much our budget lays out and how it works its a disservice to all of us.

but last I heard, his 401k is worth less than the combined value of the contributions, once again, due to a market crash.

This is one of the reason why I think SS should be changed into a retirment-insurance plan. you pay your payrol tax and you are insured the value of your contributions as if you bought treasuries. So if you are retired when it happens and a crash occurs than the value of your 401k is insured as if you've been buying treasuries the whole time. The system would be more solvent because people wouldnt use it in the boom times and when the bad times happen and polticians managed it right (big leap of faith I know) then the money would have the contributions held in reserve.

So the upside would be that your contributions are there and the govt wouldnt go broke on it and people actually have an incentive to plan for their future.

I help kids in what little spare time I have. For this woman to call me a heartless bastard is uncalled for yet typical of those who can't make substantive arguments. The fact remains that it is hypocritical for anyone to rain moral thunder down over another's contribution to the social safety net.

Unless that person is Mother Theresa or Ghandi, they are taking plenty of fruits for themselves. Is cfinnie giving that $5 a month I'm sure she can spare to aid the REAL macro suffering that exists in Africa? They would see her as someone Rich even if she was struggling on Social Security. Yet no one is forcing her to make a sacrifice. Why does that ethic not apply to higher income earners here in CA?

As I've stated in the past I'm not against a limited social safety net, SuperJoker's story is a perfect example. But it should be limited in scope. I lived in a car in my teenage years so I am not above struggle.

And stay classy Calitics! When you mod down a strong retort (that was not profane or without points) but leave the original post where I'm called a heartless bastard and have death wished upon me. Really "Fair And Balanced" of 'yall :-)

Hi. I'm Charles. I worked my way from homelessness to a business owner. Be what you have it in you to be!

CJ, from time to time they may lash out. its just best to let it slide and discuss the core points. This is their website and we are not really their target audience. So just let it slide and reply to any of their main points. Its not personal on their part and I found that the good fun part of the debate continues that way.

I was just a little thrown off there... I consider myself a very ethical and forthright individual. Suffered death wishes aren't usually things I come across LOL. It does kind of confirm my "they'd like us rounded up into camps" comment from a few days ago though :-)

And I'm not here to simply be contrarian. Bridges to those you don't agree with are essential in governance. Most of the theoretical arguments I make are based upon the fact that we all want the most fair, functional and harmonious society possible. Our side thinks that indivdual liberty and industry is the fastest path there. They see it as a top down venture. I hope with reasoned debate, not to change minds but to give some context when there beliefs slip into dogma. I do the same when I post on conservative sites.

That said it's a fun way to spend 20 mins or so out of my day!

To the left majority here I mean no discourtesy and I hope to at the very least help you polish your debating skills!

Hi. I'm Charles. I worked my way from homelessness to a business owner. Be what you have it in you to be!

As long as the tax rates get widened where earning 45,000 does not tax you at the next to highest rate, then let us go for it. We need to widen the tax rates so they would be fair and still raise revenue at the same time.

For a group that considers itself "Progressive" I find it odd that you guys advocate policies that had its heyday 50 years ago in the 1960s. Not really Progress in my book, but the GOP is stuck in the 80s so whats one to do.

Its a decent writeup Robert but it suffers from some of the usual problems. If you solve these riddles you might get your tax increases.

1) Tax&Spend. The whole philosophy of the Dems since FDR is to come up with a bunch of treats for its voter base and then make the constituents (in this case the rich backing the GOP) pay for. People know this. And people intuitively know what Maggie Thatcher stated too "The problem with socialism is that you eventually run out of other people's money." And thats where your problem is. If the left is able to successful take down a power beast like the rich and hit them with taxes people instinctivelt think "ouch, I'm next." People see the rich (with all their lobbying dollars) as firewall from paying higher taxes themselves. And who can blame them? The democrat constituency is NEVER sated! There is always a new program, a new need to spend, another victim, another sob story. When the 16th amendment was passed few actually met the threshold to pay income tax, where are we now.

2) Credibility. It still amazes me that the 16th ever passed. Cuold you imagine if the amendment had a 100 year review period? Would it pass now? Back then people knew the funding will be well spent. It will be very hard to sell your tax increase when people ask how many new boards will get populated? What new regulation or law do they want to pass? Who is the empire-builder in the bureaucracy thats wants more office space. If you can link a tax increase with no new growth in govt hiring or offices etc you may have a better pitch.

Even a cap as a percentage of budget with some indexing to inflation would be a start. Though it would probably be impossible to enforce. I still think the key issue here is the perception of the left fringe that there really is "suffering" on a macro level in CA.

In a state of almost 40 million people lets say 100,000 have it really bad with illness poverty, etc. That's .025 percent of the population. That's not macro level suffering, that's just life. There are real issues of liberty and freedom that progressives could push that libertarians and true conservatives could be real partners on.

Instead we have a "save everyone" crusade with other people's money. The after they're saved we have to get them higher wages. And then more vacation time. And then...

We end up like Greece.

Hi. I'm Charles. I worked my way from homelessness to a business owner. Be what you have it in you to be!

The current government in the UK is going all Thatcher on the populace. However, upon examination, several of their cost-cutting proposals--such as the one to sell off public lands (sort of like Richard Pombo suggesting we sell off the national parks here)--have been found not to be cost-effective at all. Their equivalent of the Congressional Budget Office evaluated the plan and found it would actually cost the government money.

As for those other people running out of money, it really doesn't seem to be happening. In fact, as Robert accurately points out, they seem to be accumulating vastly more than when the 16th was passed. Another Robert agrees with him:
Republican Distortions a Sign of Desperation
By Robert Reich
July 3, 2011
http://www.sfgate.com/cgi-bin/...

The fact that the UK is even mentioned as relevant is because Maggie turned that country around. Just check a wikipedia entry on the economic history of the UK. The Welfare state not only cost them their empire it made them incredible weak economically until the privatized a lot of stuff. To boot its still expensive there and the living standard is no where near ours.

on the rich and 16th there is a big difference on who is rich. 60% of todays superrich are self made. Back in the day it was all old money. so I'm glad the 16th prevented an aristocracy but sticking it to entrepreneurs isnt going to do us any favors.

the welfare state cost them their empire is ridiculous and so is citing wikipedia. Great Britain lost its empire not because of the emergence of a social democratic state (which really only took root in the late 40s and 50s after the effective end of their empire) but because the global balance of power shifted and they also burned themselves out in WW2. Don't forget that a lot of people throughout the world pushed them out. The social democrats didn't bankrupt them.

Moreover, Thatcher like Reagan did little in the way of actual privatization (other than the rails which as you might know are far more expensive and less efficient than they used to be. What she and he did do was restructure the state to oppose organized labor and thereby allowed corporate power that you claim to oppose to emerge. One thing for Maggie unlike Ron is that she did understand that there was history and spoke of it. Her "there is no such thing as society" was an off-hand remark that was swallowed up by a lot of other statements. It was, unfortunately, Tony Blair who actually sped up the privatization and contributed to the growing power of the finance industry which helped cause the great recession in Britain just as it did here due to the same shift from production to finance and also the lack of regulation.

I'm also a bit tired of the notion that social democracy never accomplished anything. If you look at both the growth in GDP and the growth in widespread income you will see it was higher under the New Deal and its aftermath than it has been since Reaganomics. What the libertarian critique always forgets is both the historical development of institutions and structures and also keeps pretending that all social actions are the result of free choices between individuals. But neither of those are true and you can fantasize that it might be true (it is sort of like "free markets") but it never has been and since we are not able to step out of history it never will be.

global balance of power shifted and they also burned themselves out in WW2.

Actually, it was the cost of fighting two World Wars and attempting to act as the world's policeman that cost Britain her empire. (Of course, I'd argue that an empire is, b its very nature, unsustainable.)

But the costs of fighting and winning World War I was immense on the economy of the British Empire. The war's direct economic costs were over $35bn in 1914 dollars, That's close to a trillion dollars today, for a smaller economy than ours. Britain ceased to be the largest worldwide investor to becoming a large debtor, with 40% of government spending going to debt service and the pound losing 61% of its value.

World War II cost Britain her economy. The spending was something like $400bn (Over $6 trillion dollars in 2011 dollars) for a country one quarter the size of the US, not to mention the economic damage caused by blockade and bombing. Despite this, the UK did better than most European combatants, who did not see their countries invaded and occupied. In the end, the debt was 250% of GDP, and was only paid off in 2006.

the welfare state cost them their empire is ridiculous and so is citing wikipedia.

Don't be a snob - I'm not going to list an bibliography here or recommend people a host of books to read. Wiki is enough to cover the topic.

Great Britain lost its empire not because of the emergence of a social democratic state (which really only took root in the late 40s and 50s after the effective end of their empire)

And if you are going to be a snob get your history right. British decolonization lasted from after WW2 to the 1960s. This included successful counterinsurgencies in Malay and Vietnam (yes, before they handed it over to the French).

But CaliforniaCondor is right:

Actually, it was the cost of fighting two World Wars and attempting to act as the world's policeman that cost Britain her empire.

Then you throw in the social democratic state on top of a heavily indebted country (sound familiar?) you put the nail in the coffin. the Brits had the classic guns vs butter problem, like LBJ's great society & vietnam, W and his war on terror & corporate welfare. Like britain before the choice is do you want to be a cop or caretaker. You try to do both and you go broke.

So I say again the welfare state cost them an empire. You can do one or the other but you can't do both. And to boot they are both unsustainable.

Just so you know, if you can post on Calitics, you can also rate the posts of others. So, if your posts are being rated, it is likely from other readers. You would be free to rate mine, for example.

I am glad to hear Charles is not as heartless as he sounds. I do also, in fact, try to help out the less fortunate. And I agree my ex made some poor decisions. Others were not up to him--as is so often the case in life. But, if you're willing to help feed the needy, why are you not willing to fund a safety net for the less fortunate here?

If nothing else, access to better health care would have saved the state a lot of money. He'd still be employed and paying taxes. And the state wouldn't be paying the costs to keep him in intensive care now. It's like deciding you'll just replace the engine in your car instead of paying to change the oil. Talk about a poor decision!

If nothing else, access to better health care would have saved the state a lot of money. He'd still be employed and paying taxes. And the state wouldn't be paying the costs to keep him in intensive care now. It's like deciding you'll just replace the engine in your car instead of paying to change the oil. Talk about a poor decision!

I agree that healthcare needs to be improved - i don't see it as right as those on the left do, but its also not a safety net year. Its a bsaic economic need. I don't think obamacare is going to fix or a state run health care system. But their needs to be something that untethers it from employment. Businesses don't need the burden and I shouldnt have to change insurance every year or when I change jobs.

The weirdest thing on the debate is the catch-22 part of it. if you make the healthcare an issue about helping people you'll lose half the vote that opposes bleeding heart legislation (those on the right). if you make it an economic argument you get blasted as cold and insensitive (from the left).

the left will not blast anyone arguing for universal public health care
(6.00 / 2)

just because they make an economic argument. it is one big reason why many of us support single-payer (and some of us even socialized medicine, which is quite different), especially those of us who have lived abroad in first-world countries with decent public health systems, and seen how it directly boosts the economy at all levels but insurance corporations' profit margins, both by reducing consumer expenditures on health care/insurance/medicine, freeing employees for fear of losing coverage if they switch jobs or quite to start a business, reducing business startup and new employee hiring costs, etc.

sure, the moral argument moves many on the left more, but it's the thing itself that people want, not a given mode of argument. what will get you blasted is using faux-economic justifications for gutting social welfare, not using economic arguments per se.